From malls of Florida to Idaho fields, the slump is hard to find
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Fairfax County, Va., boasts the nation's second-highest median income ($81,100). And it too has seen sales growth slow and joblessness rise. Some luxury retailers report stagnant sales.Skip to next paragraph
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"We're still doing pretty good -- about the same as last year," says Ron Wibowo, operational manager for Louis Vuitton at the ritzy Fairfax Square at Tysons Corner. The local Tiffany's won't comment, but the chain this week announced a 9 percent drop in profits and 2 percent fall in same-store sales for its latest quarter, versus the same period last year.
But with 2.9 percent unemployment, times aren't that tough.
"We're sort of insulated," says Jerry Gordon, president of the Fairfax County Economic Development Authority. Although the county spawned several Internet-related companies that have since merged or disappeared, it also is counting on post-9/11 federal spending on security and intelligence to provide 28,000 new jobs and soak up some 5 million square feet of office space in the county, he adds.
Such tales highlight a major lesson from the current slump: Local conditions trump the overall national picture.
For example, the outlook in adjacent Loudoun County, Va., with the nation's third-highest median household income, looks less rosy. Unemployment stands at 4.3 percent so far this year, the highest in a decade. And that probably doesn't include the 500 or so WorldCom employees laid off at the very end of June. The bankrupt telecommunications firm is the county's second-largest employer, behind shaky United Airlines and ahead of America Online, whose AOL Time Warner parent continues to grind through a difficult restructuring.
Nevertheless, local chamber of commerce president Randy Collins remains cautiously optimistic. A new Nordstrom store is scheduled to open next month in the county. Two luxury auto dealers BMW and Volvo have set up shop during the past year.
At another end of the economic spectrum lies Shannon County, S.D., which boasts the lowest median age in the continental US. An unorganized county, run by the Pine Ridge Tribal Reserve, Shannon's grocery store, convenience store, gas stations, and outlying mom-and-pop operations were barely affected by Wall Street's downturn. "There is a sort of vacuum here," says Norman Fourd, self-determination officer for the local Bureau of Indian Affairs. Typically, residents have to drive 50 to 100 miles to get their car fixed or their teeth cleaned.
Times are similarly tough for aging McIntosh County, N.D., not because of Wall Street but because of agriculture. "It's the worst I've seen," says Robert Wishek, president of McIntosh County Bank, who has lived in the area since 1988. Years of low grain prices, topped by a withering drought this summer, have combined to squeeze farmers and most of the local businesses.
In Ashley, the county seat, the laundromat and movie theater are up for sale on Main Street. The city now runs the bowling alley because the owner couldn't make a go of it. With a median age of 51 (fourth-highest in the continental US), residents are less likely to spend money than younger adults, Mr. Wishek says.
But in Idaho's agriculturally dependent Madison County, second youngest in the continental US, times are actually looking up. High prices for locally produced potatoes and hay, combined with the expansion of the community college to a four-year university, have increased local prosperity.
"I don't think we're feeling any of the hurt that other places are," says Clair Boyle, executive director of the county's economic development group. One block away from his home, a developer is putting up six new homes for expected newcomers.
One caveat: Don't expect a rapid return to prosperity. Hit by a stock-market downturn, "people don't make their full adjustment immediately," says Putnam economist Mr. Maki. Instead, previous downturns suggest the drag on retail sales will make itself felt every quarter for the next two to three years.